Steel, luxury goods, jet fuel and more

European Commission President Ursula von der Leyen delivers a speech during a plenary session of the European Parliament at the EU headquarters in Brussels, on March 23, 2022.

John Thys | AFP | fake images

LUXEMBOURG — The European Union is working on a new package of sanctions against Russia that will likely restrict aircraft leasing and the import and export of products such as jet fuel, steel products and luxury goods, two sources with knowledge of the discussions told CNBC.

However, the bloc remains divided on whether to extend those sanctions to energy imports. despite mounting evidence of war crimes committed by Russian forces in Ukraine.

Ukraine’s top prosecutor said 410 bodies were found in towns recaptured from retreating Russian forces around kyiv as part of an investigation into possible war crimes. Over the weekend, various international media organizations reported on the mass killings of civilians in the city of Bucha, a Ukrainian city close to the country’s capital, kyiv, which had been under Russian occupation until recently.

The reports prompted a series of calls from within the European Union for the bloc to go further and punish Moscow for its unprovoked actions. invasion of ukraine. The bloc is now working on a fifth sanctions package against Russia and the new round of measures is expected to be approved later this week.

Two EU officials, who did not want to be identified due to the sensitive nature of the talks, told CNBC that a proposal for the next sanctions package includes aircraft leasing, steel products, luxury goods and jet fuel. Both sources added that the package is still a work in progress and could change as talks continue in the coming days and ahead of a crucial meeting of EU ambassadors on Wednesday.

One of the officials added that “obviously a big component is missing,” referring to the lack of measures in the Russian energy sector.

Imposing an immediate ban on Russian gas, oil or even coal has been a hot topic of debate within the EU since Russia invaded Ukraine on February 24. While some nations support a Russian energy ban, other EU countries argue they are too dependent. on Russian energy and would hurt their own economies more than Russia’s.

France’s president, immanuel macron, said on Monday that the EU should agree to restrict Russian oil and coal after the reported atrocities in Bucha. Poland, for example, announced last month that it would stop imports of Russian coal.

However, there is a very vocal group of EU nations who are still against passing any energy sanctions.

“We want to be, [in the] short term, less dependent on Russian energy imports to the European Union and Germany will support new sanctions against Russia,” German Finance Minister Christian Lindner told CNBC in Luxembourg on Monday.

“We have to put more pressure on Putin and we have to isolate Russia. We have to cut off all economic relations with Russia, but at the moment it is not possible to cut off the gas supply,” he added.

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Asked whether, for now, as Macron suggested, the EU should go ahead with sanctions on oil and gas, Lindner said: “No speculation on my part.”

His Austrian counterpart also opposed imposing a ban on Russian gas.

“Austria is not in favor of more gas-related sanctions. We depend a lot on Russian gas and I think that all sanctions that affect us more than the Russians would not be good for us. That is why we are against sanctions on oil. “. and gas,” Magnus Brunner, Austria’s federal finance minister, told CNBC.

The European Statistics Office estimates that Austria imported almost 59% of its natural gas from Russia during 2020. Bulgaria, the Czech Republic, Latvia and Hungary imported an even larger share of natural gas from Russia that same year, according to Eurostat.

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